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Insteadthey went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit a performance of around 2 million transactions every day. In the time of writing, Bitcoin Cash is valued at $545.00 to Bitcoins $6,328.11.

When you hear bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt physical, so why do we call it mining

Because its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out into the mild yet (like the gold hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do so as a reward for creating blocks of validated transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and leave a certain port open (the downside is that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to a few nodes which it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network pretty quickly. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them to the blockchain. How do they do this By solving a complex mathematical mystery that is a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with all the data in the block and passed through a hash function, produces a result that is within a certain range.

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(For trivia lovers, this number is known as a nonce, which is a concatenation of number used once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

How do they find this number By guessing at random. The hash function which makes it impossible to forecast what the outcome will be. So, miners suppose the mystery number and use the hash function to the combination of that guessed number and also the information in the block. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there might be several nonces that produce the intended result, or there might be none (in which case the miners keep trying, but with a different block configuration). .

The first miner to acquire a resulting hash within the desired range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to find out the mystery number for your next one. As a reward for its own work, the victorious miner gets some new bitcoin. .

At the time of writing, redirected here the payoff is 12.5 bitcoins, which in time of writing will be worth almost $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for that reward, and it is a question of fortune and computing power (the further guessing calculations you can perform, the luckier you are).

Additionally, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they perform ), but also because of the large amounts of electricity that running these processors consumes. .

And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to price of power and hardware could go up during the next few years to partly compensate this reduction, but its not certain. .

The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so it takes on average approximately 10 minutes to process a block.

Why 10 minutes That is the amount of time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million is attained (expected some time in 2140).

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